Federated Farmers President, Andrew Hoggard, at last night's Invercargill protest meeting.

A growing farmer rebellion over paying for greenhouse gas emissions now appears to be making its impact felt in the National caucus and is likely to embarrass Prime Minister Jacinda Ardern and her claims to the United Nations that New Zealand could lead the world on farm emissions pricing.

A large protest meeting of farmers in Invercargill last night heard Federated Farmers President, Andrew Hoggard, withdraw his support for the Government’s proposal for farmers to pay for their emissions.

And he indicated the Feds would leave the He Waka Eke Noa farm sector partnership that had been working with the Government on a farm emissions policy.

“It’s been two and a half bloody years or more of dumb regulation after dumb regulation after dumb regulation, and  for me, it’s just like, Nah, screw it, I’m done with being polite about it,” he told the meeting to applause.

Hoggard’s comments are in response to the Government’s response to He Waka Eke Noa (HWEN), a proposal worked up by 13 agriculture sector organisations on how farmers might pay.

It proposed a carrot-and-stick approach with farmers paying a levy for their livestock emissions (methane and nitrous oxide)  but getting credits for trees and shrubs on their properties sequestering carbon and eventually, when the technology allows it, credits for mitigating technologies like anti-methane feed supplements and vaccines.

But the Government has responded by allowing vegetation credits only for riparian planting, which will be mostly on dairy farms.

In the Cabinet paper proposing the payment system, it is estimated that this would lead to a reduction of 6 – 7 per cent in dairy farm revenue but 18 to 24 per cent for sheep and cattle farms.

Ministry of Primary Industry modelling suggests this could lead to up to 18 per cent of current sheep and cattle farms ceasing to carry livestock and probably being converted to forestry.

Agriculture Minister Damien O’Connor argues that the Government is trying to accelerate the development of mitigating technology by hypothecating all the revenue from the farm levies to the new Centre for Climate Action on Agricultural Emissions, which is intended to develop high-impact technologies and farm practices to reduce methane emissions.

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The original HWEN proposal had strong support from the National caucus, DairyNZ and Beef+LambNZ, and though Federated Farmers were one of the 13 organisations involved in drawing it up, their support was less certain.

Hoggard last night said the Feds had always opposed the methane reduction target of a reduction of 10 per cent by 2030.

He said his organisation had continued within the HWEN partnership because of its original principles.

They were that the agriculture sector would work with the Government to design a pricing mechanism “where any price is part of a broader framework to support on-farm practice change” and “only to the extent necessary to incentivise the uptake of economically viable opportunities that contribute to lower global emissions.”

“It’s just gotten more and more tenuous as we’ve gone along the process, and finally, the government proposal was the knife that cut that link,” he said.

He said Federated Farmers had never supported pricing in the first place because the alternative would have been farmers going into the Emissions Trading Scheme, which would mean much higher payments and no chance of any rebates for mitigation.

 “We tried to argue that we didn’t want pricing in there, but everyone else was of the opinion that pricing had to be a part of it; otherwise, the government would reject it (the HWEN proposal)”, he said.

“And so we went along with it because we felt at least then if we’re in the team, we could push back, keep providing that sort of tension, keeping that farmer voice in there.

“And certainly throughout the process, we have managed to at least get some changes, some wins, keep some stupid things out of it.

“But it has been bloody hard work.”

Hoggard argued that what had been intended to be a levy was now a tax because of the failure to allow for sequestration. To achieve the 10 per cent gross reduction in emissions by 2030, the Government would do so by taxing farmers to force them to reduce production.

“And so the way you’ve got to think of it is that they need a gross reduction, and at the moment, without mitigations, a 10% gross reduction only comes from 10% less dry matter going down ruminants throats,” he said.

“And so that is a key thing.

“And to me, that is the fundamental change the Government has made is that change to the pricing principles and that singular focus on achieving the targets at all cost to our communities.”

His views were echoed by two South Island National MPs.

“We will not accept the government’s proposal,” said Southland MP Joseph Mooney.

“Yes, we want the research and development to happen, and we want the science and technology to be able to lower the emissions, but we need to be doing it in step, so pricing can’t get ahead of competitor countries, and we can’t put our food security at risk,” said Invercargill MP, Penny Simmonds.

But the argument within the National caucus is complex.

There is pressure from ACT, who oppose National’s support for the Zero Carbon Act and He Waka Eke Noa.

Todd Muller was the architect of the bipartisan support for the Zero Carbon Act and he told Senz radio’s “Rural Roundup” with  Andy Thompson yesterday that farmers could not opt out of paying for their emissions.

“The climate is changing; agriculture is half our emissions,” he said.

“The idea that looking forward, New Zealand simply focuses on reducing transport emissions, energy emissions, full stop, and we don’t get to the opportunity actually of reducing our emissions across the ag sector is just not a sustainable position.

“So ACT say look, nothing to see here, we’ll just put a line through it.

“I think that’s a backward step.”

There is a gap between Muller and MPs like Mooney.

But the real question within National is where does leader Christopher Luxon stand.

Agriculture and environmental stakeholder groups who have contacted him in recent days and who have spoken to POLITIK are confused.

He is not as emphatic as Muller and instead talks about National supporting an industry-led proposal.

But that is exactly what He Waka Eke Noa was.

DairyNZ chair, Jim van der Poel, has said the Government had adopted many key recommendations from the He Waka Eke Noa Partnership, but it had also made significant changes.

He said DairyNZ would work with the Government to improve its proposal, so it worked for farmers.

One of Federated Farmers’ main objections is the methane emissions targets, but DairyNZ and Muller argue that the legislation provides for these to be reviewed by the Climate Change Commission anyway, so they are not set in stone.

But Hoggard sounded as though the Feds had already made up their minds to leave He Waka Eke Noa.

“So we’ve stated our position,” he said.

“I dare say that that position does not endear us to staying in that partnership.

“So taking that position will make that decision for us.

“It’ll be up to the other partners as to whether they want to abort us or not.

“But I’m getting the sense they will be sticking with their May proposal, whereas we’ve put our bottom lines on that.

“There has to be a review of the target. Before we agree to any pricing mechanism, we’re only going to agree to a pricing mechanism that is there for the uptake of mitigations and doesn’t force emissions that cause emissions leakage. “

At this stage, opposition to the Government’s response is strongest in Southland; the question for the farm sector — and National – will be whether it moves to the North Island.

If it did, political consensus on climate change would be severely tested.